The Central Bank has issued US$166 million development bonds following an offer for US$ 125 million opened from August 4-11 with the resettlement on August 18th.

The Central Bank has offered Sri Lanka Development Bonds (SLDBs) of US$ 75 million in 3-year tenor and US$ 50 million in 4-year tenor to eligible investors for subscription at a rate of US Dollar 6 month LIBOR plus a margin to be determined through competitive bidding.

In response the government has decided to accept US$ 81 million in 3-year maturity at 6-month LIBOR plus 365 bps, and US$ 30 million in 4-year maturity at 6-month LIBOR + 375 bps respectively.

The government has also offered US$ 55 million in 5-year maturity at a rate of 6 month LIBOR + 390 bps as some investors have expressed willingness to invest in a 5-year bond, the Central Bank said.

Both foreign and local commercial banks and institutional investors subscribed bids at the auction, the Central Bank said.

"The SLDBs are transferable by endorsement, delivery and registration with the Superintendent of Public Debt of the Central Bank of Sri Lanka. Eligible investors may purchase SLDBs in the secondary market through designated agents appointed by the Central Bank of Sri Lanka," the Public Debt Department of the Central Bank said.

Fitch, Standard and Poor’s and Moody’s, three international sovereign ratings agencies recently upgraded Sri Lanka’s outlook to positive from stable. Moody’s upgraded the ratings by one notch.